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It seems that every bear market has at least one winner that manages to vastly outperform virtually all other assets. This past month, silver and palladium were the top standouts, managing to gain over 5% and 7% respectively while we saw red in nearly all other sectors of the economy and trading floor.
Let's take a look at how the top alternative assets have performed over the 30-day period ending on October 3rd, 2022:
- Gold: (-3.01%)
- Silver: +5.38%
- Platinum: +3.05%
- Palladium: +7.32%
- Bitcoin: (-2.5%)
- Ethereum: (-16%)
- S&P 500: (-8.25%)
Clearly, precious metals, with the exception of gold, had a great month amid broader market instability. Stocks were down economy-wide in September, including deep double-digit drops for leading tech stocks including AAPL and GOOG. The housing market is also continuing to take a hit as a consequence of monetary tightening policies.
The same can be said for cryptocurrency, which has taken a beating as tight monetary policies have put an end to the easy-money era and investors are becoming more selective with their investment choices. The exodus of capital from the Bitcoin and cryptocurrency markets has even led many experts to question whether crypto is “dead” as a whole. For this reason, we're agnostic-to-bearish on the crypto market until monetary policies change course—likely in 2023 or beyond.
Per MSNBC, the Fed is now forecasting rate hikes as high as 4.6% to combat inflation. Speaking of inflation, global inflation indices have only been heating up—indicating that a worldwide recessionary event may be looming on the horizon in 2023. In fact, Germany's inflation rate hit 10.0% in September, skyrocketing from 7.9% in August. We previously published a report on how closely linked inflation is to recessions, which I strongly recommend checking out.
On a worldwide scale, market stress is piling up and both investors and Wall St. are feeling its negative effects. While central banks have shored up their resolve, speculative assets are going to continue taking a hit until interest rate trends reverse. However, we could see a long spree of bankruptcies and foreclosures before that happens.
It's a lose-lose situation no matter what way you look at it. Inflation is eroding the average American’s ability to make ends meet, but high interest rates—the last tool in Chairman Powell's toolkit—will make it more expensive to borrow money, leading to widespread belt-tightening for American businesses and families.
As always, there's a silver lining.
Diversifying your investment portfolio with resilient assets non-correlated to the stock market may help fortify your savings in today's increasingly uncertain market. Precious metals may be the solution your portfolio needs to preserve its value through these hard times.
Don't know where to start? We've got you covered. Your first step is to open a self-directed IRA so your assets can appreciate on a tax-advantaged basis. For a more hands-off approach to alternative IRA investing, we suggest opening a precious metals IRA today with one of our top-ranked, pre-vetted and trusted providers.